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Social security contribution burden and firms' financial resource mismatch

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  • Yang, Gang
  • Yan, Hanxi
  • Zhang, Zhuxin
  • Cai, Wanhuan

Abstract

We explore the impact of social security contribution burden on firms' financial resource mismatch using a sample of Chinese listed manufacturing firms. It is found that there is a positive U-shaped relationship between social security contribution burden and firms' financial resources mismatch; the degree of financial resources distortion is exacerbated when firms' social security contribution rate deviates from the optimal social security contribution rate; and heterogeneity analysis shows that the deviation of social security contribution exacerbates financial resources mismatch more in areas with higher wage levels. This paper provides new empirical evidence for optimizing social security policy design.

Suggested Citation

  • Yang, Gang & Yan, Hanxi & Zhang, Zhuxin & Cai, Wanhuan, 2025. "Social security contribution burden and firms' financial resource mismatch," Finance Research Letters, Elsevier, vol. 85(PD).
    • Handle: RePEc:eee:finlet:v:85:y:2025:i:pd:s1544612325014461
    DOI: 10.1016/j.frl.2025.108191
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